Parametric Portfolio Associates LLC ("Parametric"), a majority owned subsidiary of Eaton Vance Corp. (NYSE: EV), today announced the addition of a new Liquid Alternative strategy to their suite of Volatility Risk Premium (NYSEARCA:VRP) strategies.
The Parametric Liquid Alternative strategy is designed to provide investors with a diversifying risk premium that targets risk-adjusted returns similar to many hedge funds. The strategy employs a mix of fully collateralized S&P 500® Index options, creating an effective beta targeted by many hedge funds, but without the complicated structure, leverage, illiquidity or high fees typically associated with them.
The Parametric VRP strategies include a spectrum ranging from covered calls to cash-secured put selling, and include hybrid strategies which vary the underlying portfolio as well as the mix of options. All of these strategies are designed to target a client's specific risk/return objectives.
Tom Lee, Managing Director - Investment Strategy and Research, Parametric Minneapolis Investment Center states, "We are launching the Liquid Alternative strategy to meet a growing demand for strategies that seek to reduce volatility through the introduction of a diversifying risk premium. Additionally, our clients have asked us to deliver a liquid, low cost solution for core hedge fund allocations."
"With over 20 years of experience managing volatility risk premium strategies, Parametric assets under management have more than doubled from $4.5 billion at the end of 2012 to nearly $10 billion at the end of 2015," Mr. Lee adds. "According to our research, a long-term approach can successfully generate incremental returns over time, and can be more effective than other, more tactical strategies. These strategies are designed to consistently access the persistent VRP associated with selling equity index options. This disciplined, systematic approach removes the challenge of emotions commonly associated with actively managed strategies."
Parametric, headquartered in Seattle, WA, is a leading global asset management firm, focused on the delivery of engineered portfolio solutions, including rules-based alpha-seeking equity, and alternative strategies, as well as implementation services including custom core equity, futures overlay and centralized portfolio management. As of December 31, 2015, Parametric manages approximately $152.3 billion in total assets on behalf of institutions, high-net-worth individuals and fund investors in the U.S. and internationally. Parametric is a majority-owned subsidiary of Eaton Vance Corp., and its principal investment centers are located in Seattle, WA, Minneapolis, MN, and Westport, CT. For more information about Parametric, visit parametricportfolio.com.
About Eaton Vance
Eaton Vance is one of the oldest investment management firms in the world, with a history dating to 1924. Eaton Vance and its affiliates managed $308 billion in assets as of December 31, 2015, offering individuals and institutions a broad array of investment strategies and wealth management solutions. The Company's long record of providing exemplary service, timely innovation and attractive returns through a variety of market conditions has made Eaton Vance the investment manager of choice for many of today's most discerning investors. For more information about Eaton Vance, visit eatonvance.com.